Orla Mining Ltd. (TSX: OLA) (NYSE: ORLA) is pleased to announce that the Company has completed its acquisition of the Musselwhite Gold Mine in Ontario, Canada from Newmont Corporation. (All amounts in this press release are in US dollars unless otherwise indicated).

“The addition of Musselwhite transforms Orla into a North American-centred, geographically diversified intermediate gold producer with multiple gold-producing assets and a self-funded growth portfolio.  Musselwhite strengthens our North American presence and more than doubles our annual gold production. This important Canadian gold mine also offers growth potential through optimization and mine life extension, something we intend to aggressively pursue.

On behalf of the entire Orla Mining team, I want to thank our shareholders who have overwhelmingly supported our growth ambitions. I would also like to extend my sincere gratitude to Prem Watsa of Fairfax, and Pierre Lassonde, for their trust, support, and encouragement throughout the transaction process.

Orla intends to place a strong emphasis on local stakeholders in Northern Ontario. We will maintain all existing relationships and honour all existing contracts with First Nations partners, businesses, suppliers, contractors, and vendors.

To the Musselwhite employees, we are thrilled to welcome you to the Orla team and look forward to building upon your foundation of hard work, dedication, and success. We are committed to investing in you and the operation for many years to come and we’re excited to hit the ground running.”

–       Jason Simpson, President and CEO, Orla Mining

Musselwhite Mine

• Musselwhite is a producing, underground gold mine located on the shore of Opapimiskan Lake in Northwestern Ontario. It has been in operation for over 25 years, having produced close to 6 million ounces of gold to date, with a long history of resource growth and conversion.
• Based only on the current technical report, Musselwhite has a mine life until 2030 with average annual gold production of 202 koz at $1,269/oz all-in sustaining cost (“AISC”)^1,2. Significant opportunities exist to optimize the operation and extend mine life through known extensions of the ore body.
• The NPV5% at January 1, 2025, of Musselwhite is estimated at approximately $1 billion using a flat $2,500 gold price².
• The addition of Musselwhite transforms Orla into a multi-asset intermediate producer with an immediate 140% increase in annual gold production to over 300 koz at competitive costs.
• This acquisition builds on Orla’s established track record of development and operating success and is aligned with the Company’s strategy for growth and value creation, as exemplified by an over 500% share return in the Company’s less than 10-year history.
• The upfront cash consideration for the acquisition of $810 million and gold-price linked contingent consideration of $40 million³.

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¹ Non-GAAP measure. Excludes exploration and project growth spending. Refer to the “Non-GAAP Measures” section of this news release.

² Per the Company’s technical report for the Musselwhite Mine entitled “Technical Report – Musselwhite Mine Project, Ontario, Canada” with an effective date of November 18, 2024 (the “Musselwhite Technical Report”)

Transaction Structure and Acquisition Financing

As noted in the Company’s press release on November 18, 2024, the Transaction has been structured to take advantage of Orla’s strong balance sheet and financial flexibility and avoids any upfront equity dilution. The $810 million in upfront consideration has been funded from a combination of debt, gold prepayment, new convertible notes, and cash on hand (collectively, the “Transaction Financing”) including:

• $250 million credit facility (the “Credit Facility”) with a syndicate of lenders comprised of the Bank of Nova Scotia, Bank of Montreal, Canadian Imperial Bank of Commerce and ING Capital LLC, and consisting of:
  • $150 million from the Company’s existing revolving credit facility, with an August 2027 maturity.
  • $100 million under a three-year term loan, with quarterly repayments of $5 million beginning December 31, 2025, and the balance to be paid at maturity.

The interest rate under the Credit Facility is based on the term Secured Overnight Financing Rate (SOFR), plus an applicable margin ranging from 2.50% to 3.75% based on the Company’s leverage ratio at the end of each fiscal quarter, provided that for the first two quarters there will be a minimum applicable margin of 3.0%. Orla will have the ability to repay the Credit Facility in full, without penalties, at any time prior to the maturity date.

• $360 million gold prepayment (the “Gold Prepayment”) executed with the Bank of Montreal, ING Capital Markets LLC and Canadian Imperial Bank of Commerce, with the following terms.
  • The Company has received an upfront payment of $360 million based on gold forward prices averaging approximately $2,834 per ounce.
  • In exchange, the Company will make 36 equal monthly deliveries of gold ounces from March 2025 to February 2028totaling 144,887 gold ounces.
• $200 million in senior unsecured convertible notes (the “Convertible Notes”) led by the Company’s cornerstone shareholders, Fairfax Financial Holdings Limited (“Fairfax”), Pierre Lassonde, and Trinity Capital Partners Corporation:
  • Coupon: 4.5% per annum, payable in cash.
  • Maturity: Five years from the date of issuance.
  • Conversion Right: The Convertible Notes may be converted in full or in part at any time prior to the maturity date, by the holder thereof, into common shares (the “Shares”) of Orla.
  • Conversion Price: The initial conversion price for the Convertible Notes will be C$7.90 per Share (the “Conversion Price”), which will be translated to US dollars at a fixed exchange rate of 1.40 CAD/USD. The Conversion Price represents a premium of 42% relative to the closing price of the Shares on Friday November 15, 2024, the last trading day prior to the announcement of the Transaction. Based on the Conversion Price, 35,443,026 Shares are issuable on conversion of the Convertible Notes.
  • Redemption Right: After the 18-month anniversary of the issuance, the Company may redeem the Convertible Notes, provided that the 20-day volume weighted average price of the Shares is not less than 130% of the Conversion Price.
  • Warrants: The holders of Convertible Notes received a total of 23,392,397 common share purchase warrants (the “Warrants”), representing 0.66 Warrants for each Share issuable upon conversion of the Convertible Notes. The Warrants shall have an exercise price of C$11.50 per Share and shall expire on the fifth anniversary of the closing of the Transaction.

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³ $20 million to be paid to Newmont should the average spot gold price exceed $2,900/oz for the initial one-year period following closing of the Transaction; and $20 million to be paid to Newmont should the average spot gold price exceed $3,000/oz for the second full year period following closing of the Transaction.

At the close of the Transaction, the Company had approximately $191 million in cash, and $450 million in long-term debt, resulting in approximately $259 million in net debt⁴.

Next Steps

• The Musselwhite operation will be integrated into Orla through 2025. In the second quarter, the Company plans to provide updated 2025 guidance to include the Musselwhite Mine.
• The Company intends to immediately begin an aggressive exploration campaign to test historical drilling that suggests at least two to three kilometres of mineralized strike potential beyond the current reserves.

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⁴ Non-GAAP measure. Refer to the “Non-GAAP Measures” section of this news release.

About Orla Mining Ltd.

Orla’s corporate strategy is to acquire, develop, and operate mineral properties where the Company’s expertise can substantially increase stakeholder value. The Company has three material projects, consisting of two operating mines and one development project, all 100% owned by the Company: (1) Camino Rojo, in Zacatecas State, Mexico, an operating gold and silver open-pit and heap leach mine. The property covers over 139,000 hectares which contains a large oxide and sulphide mineral resource, (2) Musselwhite Mine, in Northwestern Ontario, Canada, an underground gold mine that has been in operation for over 25 years and produced close to 6 million ounces of gold, with a long history of resource growth and conversion, and (3) South Railroad, in Nevada, United States, a feasibility-stage, open pit, heap leach gold project located on the Carlin trend in Nevada. The technical reports for the Company’s material projects are available on Orla’s website at www.orlamining.com, and on SEDAR+ and EDGAR under the Company’s profile at www.sedarplus.ca and www.sec.gov, respectively.